One of the world's biggest mining firms will pay $1.3 billion over last year's Brazilian dam disaster

A
protester holds a placard outside the venue for the annual
general meeting for mining company BHP Billiton in Perth, Western
Australia, November 19, 2015.Reuters

MELBOURNE - BHP Billiton will book a charge of up to $1.3 billion
to cover the costs of a dam disaster last November at the Samarco
iron ore mine in Brazil, putting it on course to report its worst
ever annual loss.

BHP said on Thursday the provision of between $1.1 billion and
$1.3 billion partly reflected uncertainty on when Samarco, its
iron ore joint venture with Brazil's Vale, would resume
operations.

The charge accounts for BHP's share of a settlement that the
company and Vale reached with the Brazilian agreement to cover
clean-up costs and damages for the dam burst that killed 19
people, left hundreds homeless and polluted a major river.

Analysts are expecting BHP to report an attributable full-year
profit, before one-offs, of about $1.1 billion, according to
Thomson Reuters I/B/E/S.

But with one-off charges in the first-half of $6.1 billion after
tax, plus the Samarco provision in the second half, the net
result will be the company's worst ever.

The Samarco disaster will continue to weigh on BHP as the
ultimate payout remains up in the air after a Brazilian court
recently decided to reinstate a $6 billion public civil claim
over the disaster. BHP and Vale have said they will appeal that
decision.

BHP Billiton is also providing a further $134 million to help
compensate people hit by the dam spill, as well as a short-term
loan of up to $116 million to Samarco.

"The safe restart of the Samarco operations remains an important
priority, along with the restructure of Samarco's debt," BHP
said.

Read the original article on Reuters. Copyright 2016. Follow Reuters on Twitter.